Top Oil Producers To Consider Fresh Cuts As Trade War Hits Prices

Indigenous Firms Plan To Increase Oil Output

 

Top oil producers will consider fresh output cuts at a meeting this week, but analysts are doubtful they will succeed in bolstering crude prices dented by the US-China trade war.

The OPEC petroleum exporters’ cartel and key non-OPEC members want to halt a slide in prices that has continued despite previous production cuts and US sanctions that have squeezed supply from Iran and Venezuela.

Analysts say the OPEC+ group’s Joint Ministerial Monitoring Committee, which monitors a supply cut deal reached last year, has limited options when it meets in Abu Dhabi on Thursday.

UAE Energy Minister Suheil al-Mazrouei said on Sunday the group would do “whatever necessary” to rebalance the crude market, but admitted that the issue was not entirely in the hands of the world’s top producers.

Speaking at a press conference in Abu Dhabi ahead of the World Energy Congress, to start Monday, he said the oil market is no longer governed by supply and demand but is being influenced more by US-China trade tensions and geopolitical factors.

The minister said that although further cuts will be considered at Thursday’s meeting, they may not be the best way to boost declining prices.

“Anything that the group sees that will balance the market, we are committed to discuss it and hopefully go and do whatever necessary,” he said.

“But I wouldn’t suggest to jump to cuts every time that we have an issue on trade tensions.”

While cuts could help prices, they could also mean producers lose further market share, analysts say.

“OPEC has traditionally resorted to production cuts in order to shore up the prices,” said M. R. Raghu, head of research at Kuwait Financial Centre (Markaz).

“However, this has come at the cost of reduction in OPEC’s global crude market share from a peak of 35 percent in 2012 to 30 percent as of July 2019,” he told AFP.

The 24-nation OPEC+ group, dominated by the cartel’s kingpin Saudi Arabia and non-OPEC production giant Russia, agreed to reduce output in December 2018.

That came as a faltering global economy and a boom in US shale oil threatened to create a global glut in supply.

Previous supply cuts have mostly succeeded in bolstering prices.

But this time, the market has continued to slide — even after OPEC+ agreed in June to extend by nine months an earlier deal slashing output by 1.2 million barrels per day (bpd).

Trade war

The new factor is the trade dispute between the world’s two biggest economies, whose tit-for-tat tariffs have created fears of a global recession that will undermine demand for oil.

Saudi economist Fadhl al-Bouenain said the oil market has become “highly sensitive to the US-China trade war”.

“What is happening to oil prices is outside the control of OPEC and certainly stronger than its capability,” Bouenain told AFP.

“Accordingly, I think OPEC+ will not resort to new production cuts” because that would further blunt the group’s already shrunken market share, he said.

European benchmark Brent was selling at $61.54 per barrel Friday, in contrast with more than $75 this time last year but up from around $50 at the end of December 2018.

The deliberations also coincide with stymied production from Iran and Venezuela and slower growth in US output, meaning that supplies are not excessively high.

“US shale output growth does not have the same momentum as in previous cycles, and OPEC production is at a 15-year low, having fallen by 2.7 million barrels per day over the past nine months,” Standard Chartered said in a commentary last month.

“We think that the oil policy options for key producers are limited, for the moment,” the investment bank said.

No decisions will be taken at Thursday’s meeting, but it should produce recommendations ahead of an OPEC+ ministerial meeting in Vienna in December.

Rapidan Energy Group said the alliance might need to cut output by an additional one million bpd to stabilise the market.

But the problem will be deciding which member countries will shoulder the burden of any new cuts.

Saudi Arabia, which is the de facto leader of OPEC and pumps about a third of the cartel’s oil, took on more than its fair share last time around.

It has also undergone a major shake-up in its oil sector, announcing the replacement of energy minister Khalid al-Falih with Prince Abdulaziz bin Salman in the early hours of Sunday morning ahead of a much-anticipated stock listing of state oil giant Aramco.

Bouenain said he believes that Riyadh is likely to resist taking on further cuts, given the impact on the kingdom’s revenues.

Raghu said that “without a favourable resolution to the dispute, OPEC’s production cuts will not result in a sizeable uptick of oil prices.”

AFP

OPEC Kingpin Saudi Arabia Replaces Energy Minister

 

 

Saudi Arabia’s King Salman named his son as energy minister after veteran official Khalid al-Falih was sacked, state media said Sunday, in a major shakeup as the OPEC kingpin reels from low oil prices.

The appointment of Prince Abdulaziz bin Salman, half brother to de facto ruler Crown Prince Mohammed bin Salman, comes as Saudi Arabia prepares for a much-anticipated stock listing of state-owned oil giant Aramco.

“Khalid al-Falih has been removed from his position,” the official Saudi Press Agency said, citing a royal decree.

“His royal highness Prince Abdulaziz bin Salman is appointed minister of energy.”

The kingdom also replaced the deputy energy minister, SPA added.

Since his appointment as oil minister in 2016, Falih has been the face of Saudi energy policy but the veteran technocrat had seen his portfolio shrink in recent weeks.

His ouster comes just days after he was removed as chairman of Aramco as the company prepares for a much-touted initial public offering (IPO).

He was replaced in that post by Yasir al-Rumayyan, governor of the kingdom’s vast Public Investment Fund.

Falih’s powers were diminished last month when the world’s top oil exporter announced the creation of a new ministry of industry and mineral resources, separating it from his energy ministry.

It was widely speculated there was dissatisfaction with Falih within the top levels of government over the low price of oil ahead of the Aramco IPO — even as the kingdom has continued to cut output to balance global demand.

‘Wealth of experience’

OPEC and its allies are scheduled to meet in Abu Dhabi on September 12 to review their strategy on limiting production to tackle a global supply glut and shore up prices.

It was unclear whether there would be a change in Saudi policy under Prince Abdulaziz, who joined the oil ministry in the 1980s and has served in a variety of senior positions.

“Prince Abdulaziz has been in the oil ministry for decades… He joined the oil ministry in the late 1980s and worked closely with the three previous oil ministers,” said Ali Shihabi, founder of the now-shuttered pro-Saudi think-tank Arabia Foundation.

“(He) has attended virtually every OPEC meeting since then so brings a wealth of institutional experience.”

His appointment further concentrates power within the family of King Salman. His other son Prince Mohammed controls all the major levers of power and is heir to the Arab world’s most powerful throne.

And his younger son, Prince Khalid bin Salman, serves as deputy defence minister.

Aramco is stepping up efforts to float around five percent of the company, in what could potentially be the world’s biggest stock sale.

It aims to raise up to $100 billion based on a $2 trillion valuation of the company, but amid low oil prices investors have debated whether Aramco is really worth that much.

Failure to reach a $2 trillion valuation as desired by Saudi rulers is widely considered the reason the IPO, earlier scheduled for 2018, has been delayed.

The planned IPO forms the cornerstone of a reform programme envisaged by Crown Prince Mohammed bin Salman to wean the Saudi economy off its reliance on oil.

Saudi Aramco has not announced where the listing will be held, but London, New York and Hong Kong have all vied for a slice of the much-touted IPO.

The oil giant is considering a two-stage IPO, with a domestic debut and a subsequent international listing possibly in Tokyo, the Wall Street Journal reported last month.

Nigeria Will Comply With OPEC, Non-OPEC Output Cut Deal, Says NNPC Boss

A file photo of NNPC GMD, Mele Kyari.

 

 

The Nigerian government says it is committed to the production adjustments agreed on under the Declaration of Cooperation (DoC) between member countries of the Organisation of the Petroleum Exporting Countries (OPEC) and Non-OPEC Countries.

Group Managing Director of the Nigerian National Petroleum Corporation (NNPC) and Nigeria’s Representatives on the OPEC Economic Commission Board, Mr Mele Kyari, said this in a statement on Wednesday in Abuja.

According to him, the country is totally committed to full compliance with the agreement reached by the parties to the DoC at the last Ministerial Meeting of what is known as OPEC Plus, held on July 2 in Vienna, Austria.

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“Right now, we are not only committed to the agreement but we have elevated our attitude towards it to the point of complete devotion to the adjustments and we urge other parties to follow suit,” the OPEC Rep said.

He was optimistic that the momentary and artificially induced bearish trends would naturally correct itself based on the strong market fundamentals which have remained steadfast despite the price slid.

Kyari noted that with a visible steady decline in commercial stock overhang propelled by healthy demand, it is only logical for all advocates of oil price stability like the OPEC Plus allies to comply strictly with the agreed production adjustments.

He explained that with the increasing volatility of the oil market, it has become commonsensical for Nigeria and all other parties to the agreement to entrench an attitude of unwavering devotion to the deal anchored on full and timely conformity to their obligations.

Iran: OPEC Determined To Avoid ‘Energy Crisis’ – Barkindo

Barkindo
OPEC’s Secretary-General, Mohammed Barkindo

 

OPEC is determined to avoid a global “energy crisis” as some of its members are facing international sanctions and others struggling with unrest, the cartel’s secretary-general said in Tehran on Thursday.

“As an organisation, we will remain focused on our goal of avoiding an energy crisis that may affect the global economy,” Mohammed Barkindo said on the sidelines of an oil and gas exhibition.

READ ALSO: Nuclear Deal: Iran ‘Playing With Fire’ – Trump

The Organisation of the Petroleum Exporting Countries will pursue this policy “despite current troubles in several of its member countries,” he said.

His comments came as the end of US sanction waivers for purchases of oil from key OPEC member Iran was due to kick in on Thursday.

Venezuela, another cartel member, is also facing sweeping US sanctions and in the throes of political troubles while fighting rages between rival forces for control Tripoli, capital of oil-rich Libya.

Barkindo did not name any country but said some OPEC producers were “currently under unilateral sanctions” — a reference to Iran and Venezuela.

Another country “is also going through transitional challenges with all its potential consequences,” Barkindo said, also apparently about Venezuela where opposition leader Juan Guaido is trying to rally demonstrators against President Nicolas Maduro.

Another cartel member he said, alluding to Libya,  “is fighting day in and day out to avoid an all-out war”.

OPEC is “committed to staying united” and “not slip back into the chaos” it has faced in recent years, Barkindo said.

Iran, as a founding member of the organisation, has regularly slammed some of the cartel’s members for going along with Washington’s policies against Iran and lacking solidarity.

On Wednesday, Iran’s oil minister Bijan Namdar Zanganeh accused OPEC members he did not name of sowing “division” and threatening the cartel’s “disintegration”.

These countries — he said referring to Iraq and oil kingpin Saudi Arabia —  were “exaggerating” their production capacity to reassure markets after the US lifted sanction waivers for buyers of Iranian crude.

The end of the exemptions announced on April 22 has sparked fears of supply shortages and pushed prices up.

AFP

OPEC Eyes Output Cuts As Trump Calls For Boost

 

OPEC members and other oil-producing countries mulled cuts in output Thursday to prop up plunging prices, defying repeated calls by US President Donald Trump that they keep the taps open.

“We’re looking for a sufficient cut to balance the market, equally distributed between countries,” Saudi oil minister Khalid al-Falih told reporters ahead of an OPEC meeting in the Austrian capital.

Oil ministers from 20 or so countries are in Vienna for two days of meetings — first, the 15 members of OPEC, then a wider group including countries outside the cartel — to discuss how to counter the tumble in prices over the past two months.

The price of a barrel of Brent, the European benchmark, fell four percent to below $60 Thursday, hit by the Saudi comments which were taken on the markets to be very cautious and concerns over an economic slowdown.

On Wednesday, Trump took to Twitter to urge producers to keep pumping.

“Hopefully OPEC will be keeping oil flows as is, not restricted. The World does not want to see, or need, higher oil prices!” said Trump, who has repeatedly accused the cartel of keeping prices artificially high.

Saudi minister al-Kalih pointedly said Washington should back off.

“We don’t need permission from anyone to cut,” he said.

The US “is not in a position to tell us what to do,” he added.

At the end of 2016, OPEC’s regular members joined forces with other countries — most notably Russia — to scale back output in a bid to reduce a glut that was weighing on prices.

The coordinated move — which has since been extended — stimulated a long rally in oil prices right up until October 2018.

Over the past two months, however, prices have plunged again.

 Cuts on the cards? 

In order to try and counter this, the so-called OPEC+ — who together account for more than half of the world’s oil output — is discussing renewing the pact or perhaps cutting output still further.

All the signals are that more reductions in output are on the cards, despite the pressure from Trump, who argues that higher energy costs will choke off the economy.

“A million (barrels cut) would be ideal,” the Saudi minister said. “Ideally, everyone should join equally. I think that’s the fair and equitable solution.”

OPEC daily output stood at 32.99 million barrels in October, according to the International Energy Agency.

However, OPEC’s third-biggest producer Iran wants to be exempted from any such measures.

Given the economic sanctions being reimposed by the United States, the Islamic republic ” doesn’t join any agreement for cutting production because of the special situation Iran faces,” oil minister Bijan Namdar Zanganeh said.

Zangeneh said the estimated surplus currently on the market amounted to 1.3-2.4 million barrels per day.

Ideally, “the price would be better to stand at $60-70. That is acceptable for most OPEC countries.”

Trump’s intervention complicates matters.

OPEC kingpin Saudi Arabia, in particular, finds itself in an especially delicate position in the wake of the murder of opposition journalist Jamal Khashoggi.

Trump has continued to support the kingdom despite worldwide outrage over the murder but he is at the same time keeping up the pressure for lower prices.

“The big unknown is how President Trump will react to any production cuts,” said analysts at ING.

Iran’s Zangeneh said it was the first time a US president was trying to tell OPEC what to do.

“They should know that OPEC is not part of their Secretary of Energy.”

Most OPEC members felt the same way, but “some members are going along with US policy,” he said.

Negotiations between OPEC members are fraught, however, as some  feel that Saudi Arabia wields too much clout in setting policy.

Iran has accused Saudi Arabia of being in thrall to the US.

In a surprise move on Monday, Qatar — which has been an OPEC member since 1961 — said it would quit the cartel next month in order to focus on gas production.

Doha accounts for only around two percent of OPEC output but the move caught the headlines given the political overtones.

Qatar minister Saad Sherida Al-Kaabi said he had met a number of other OPEC ministers, but not his Saudi Arabian colleague.

“I don’t think they want to meet me. They are blockading our country,” he told journalists.

Qatar has been isolated by a group of countries led by Saudi Arabia since June 2017, in the worst political fallout between the energy-rich Gulf powers.

AFP

Qatar To Quit OPEC In 2019

Saad Sherida Al-Kaabi, Qatari Minister of State for Energy Affairs, speaks during a press conference in the capital Doha on December 3, 2018. Qatar is to leave OPEC next month in order for the Gulf state to focus on gas production.  Anne LEVASSEUR / AFP

Qatar is to leave OPEC next month in order for the Gulf state to focus on gas production, Energy Minister Saad al-Kaabi announced on Monday.

“Qatar has decided to withdraw its membership from OPEC effective January 2019,” Kaabi said at a Doha press conference.

He added that Qatar would still continue to produce oil but would concentrate on gas production, where it is the biggest exporter of liquified natural gas in the world.

“We don’t have great potential [in oil], we are very realistic. Our potential is gas.”

Kaabi said that OPEC, which Qatar joined in 1961, was told of the decision on Monday ahead of the announcement.

The organization is dominated by oil-rich Saudi Arabia, which since June 2017 has led a bloc of countries in imposing a blockade on Qatar.

AFP

Oil Prices Slump Over Concerns About Excess Supply, Weak Demand

Indigenous Firms Plan To Increase Oil Output

 

Oil prices slumped Friday to lows not seen since last year as concerns over high crude supplies and uncertain economic growth triggered massive selling.

The petroleum slump, which took major oil contracts down to their lowest level since October 2017, comes as oil output remains high in the United States, Russia and Saudi Arabia and as some forecasters have trimmed their outlook for global growth, due in part to the US-China trade fight.

US oil benchmark West Texas Intermediate dropped $4.21 to $50.42 a barrel for January delivery, a decline of 7.7 percent.

In London, Brent oil futures for January delivery, slid 6.1 percent to $58.80 per barrel.

“The truth of the matter remains that rising global crude supply coupled with worrying signs of slowing demand have written a recipe for disaster for the oil markets,” said Lukman Otunuga, a research analyst at FXTM.

Global stock markets were mixed, with major US indices retreating in part due to worries about lower oil prices and weak global growth.

Bourses in Paris and Frankfurt notched modest gains, while London, Shanghai and London all fell.

Trump effect?

High global oil production compared to demand was the top reason for Friday’s selling, while the outlook for a weakening world economy led investors to conclude that growth would not be strong enough to soak up the surplus.

The retreat comes ahead of a meeting of the Organisation of the Petroleum Exporting Countries in Vienna on December 6.

Some analysts view the organisation as constrained following heavy pressure from US President Donald Trump on Saudi Arabia.

Earlier this week, Trump thanked Saudi Arabia for low prices and decided to essentially overlook the Central Intelligence Agency’s reported conclusion over Crown Prince Mohammed bin Salman’s involvement in the gruesome murder of journalist Jamal Khashoggi, a stance that has outraged White House critics.

“Although most analysts claim that this has to do with supply overhang and increased production from Russia and Saudi Arabia, the bottom line is that the US President keeps pushing for lower prices,” said Fiona Cincotta, senior market analyst at City Index trading group.

“While this is the case it will be difficult to see a return to oil at a higher level unless oil cartel OPEC decides on a major output cut at its next meeting.”

But Andy Lipow of Lipow Oil Associates predicted the “Saudis will decide in their best interest to cut production,” adding that “it will not have an impact on the relationship with Washington because the US already said how this relationship was important and how important was the weapon business with the Saudis.”

Still, Friday’s drop in prices reflects market concern that OPEC production cuts are “not going to be enough to support prices,” Lipow added.

The drop in oil prices reverberated in equity markets, with oil giants Chevron, Royal Dutch Shell and Total all shedding three percent or more on their local bourses.

Chinese shares also stumbled as Shanghai slumped by more than two percent, with the tech sector hit hard by a Wall Street Journal report that Washington is urging its allies to avoid using equipment from Chinese telecoms giant Huawei.

Worsening trade tensions between the United States and China have shattered confidence on global trading floors.

Key figures around 1930 GMT

Oil – West Texas Intermediate: DOWN $4.21 at $50.42 per barrel

Oil – Brent Crude: DOWN $3.80 at $58.80 per barrel

New York – Dow: DOWN 0.7 percent at 24,285.95 (close)

New York – S&P 500: 0.7 percent at 2,632.56 (close)

New York – Nasdaq: DOWN 0.5 percent at 6,938.98 (close)

London – FTSE 100: DOWN 0.1 percent at 6,952.86 points (close)

Frankfurt – DAX 30: UP 0.5 percent at 11,192.69 (close)

Paris – CAC 40: UP 0.2 percent at 4,946.95 (close)

EURO STOXX 50: UP 0.3 percent at 3,137.21 (close)

Tokyo – Nikkei 225: Closed Friday for holiday

Hong Kong – Hang Seng: DOWN 0.4 percent at 25,927.68 points (close)

Shanghai – Composite: DOWN 2.5 percent at 2,579.48 points (close)

Pound/dollar: DOWN at $1.2805 from $1.2877 at 2200 GMT Thursday

Euro/dollar: DOWN at $1.1331 from $1.1403

Dollar/yen: DOWN at 112.85 yen from 112.95 yen

AFP

Trump Accuses OPEC Of ‘Rip-Off’

FILE photo of US President,Donald Trump AFP

 

US President Donald Trump accused members of the OPEC oil cartel of “ripping off” the world on Tuesday as he called for a lowering of fuel prices.

“The United States stands ready to export our abundant affordable supply of oil, clean coal, and natural gas,” Trump told the United Nations, General Assembly.

 

“OPEC and OPEC nations are, as usual, ripping off the rest of the world, and I don’t like it. Nobody should like it.”

 

AFP

Russia, Saudi Seek Raised OPEC Output Of 1.5 Million Barrels Per Day

Indigenous Firms Plan To Increase Oil Output

 

Russia and Saudi Arabia will ask OPEC to hike production by 1.5 million barrels a day in the third quarter of 2018, Russian Energy Minister Alexander Novak said on Saturday.

OPEC and Russia decided together in 2016 to cut their supply in order to push prices up following a crash induced by a global crude production glut.

An oil production shortfall in Iran and Venezuela has changed the scenario for the two countries and members of the oil cartel.

Novak said Moscow and Riyadh “propose increasing production in the third quarter by 1.5 (million bpd),” according to RIA Novosti news agency.

“We are only proposing this for the third quarter. In September we will review the situation in the market and decide the future course.”

Russian President Vladimir Putin and Novak met Saudi Saudi Crown Prince Mohammed bin Salman before the opening World Cup match in Moscow.

Since 2017, an OPEC agreement on production cuts has allowed oil prices to rise but there are fears that renewed American sanctions on Iran and a fall in output in crisis-hit Venezuela could disrupt supply.

AFP

Trump Accuses OPEC Of Driving Up Oil Prices

US President Donald Trump marks Memorial Day with a speech at Arlington National Cemetery in Arlington, Virginia, on May 28, 2018. JIM WATSON / AFP

 

US President Donald Trump on Wednesday accused the Organization of Petroleum Exporting Countries of driving up oil prices, in a fresh swipe at the cartel’s agreement to cap production.

“Oil prices are too high, OPEC is at it again. Not good!” he wrote on Twitter.

Oil prices peaked in late May, hitting the $80 per barrel ceiling on the Brent futures contract and $72.24 on the West Texas Intermediate.

Traders are holding their breath for the June 22 meeting of oil ministers from OPEC member states in Vienna.

In April Saudi Energy Minister Khaled al-Faleh said the global market has the capacity to absorb higher oil prices — a remark that drew a swift reaction Trump.

“With record amounts of Oil all over the place, including the fully loaded ships at sea, Oil prices are artificially Very High! No good and will not be accepted!” Trump tweeted on April 20.

OPEC producers and non-OPEC countries struck a deal in 2016 to trim production by 1.8 million barrels per day to reduce a global glut of oil.

The deal, which is due to run out at the end of 2018, has succeeded in boosting oil prices above $70 a barrel from below $30 a barrel in early 2016.

AFP

Oil Prices Fall As Saudis See Likely Supply Boost

 

Indigenous Firms Plan To Increase Oil Output

 

Global oil prices fell Friday after top producer Saudi Arabia signalled a likely boost in supply as soon as the third quarter, and world stock markets were mixed over the sudden US move to cancel the summit with North Korea.

Saudi oil minister Khaled al-Faleh said at an economic conference in Russia that a gradual output increase could happen in the second half of the year to prevent any supply shocks, according to the RIA Novosti agency.

OPEC and 10 other oil producers agreed at the end of 2016 to cut output by 1.8 million barrels per day to clear a glut that had led to a collapse in prices in 2014.

The deal, which has been extended until the end of 2018, has led to that glut disappearing and prices have recovered from around $30 per barrel to around $80.

The Saudi comments sent oil prices tumbling by over three percent. Brent Crude fell to $76.43 per barrel and WTI Crude to $68.03 around 1545 GMT.

Russia’s oil tsar Alexander Novak said ministers from the OPEC cartel and other members of the production pact would discuss how much to increase production next month.

“If we come to a common opinion that it is necessary” to increase supply it “should probably take place from the third quarter,” Novak said, according to RIA Novosti.

Uncertainties about supplies from Iran and Venezuela have led prices to spike higher in recent weeks, with industry players warning they could jump to $100 per barrel.

In stocks, London and Frankfurt indices finished the week slightly higher, while Paris was essentially flat at the close as investors hesitated amid the confusing series of reports on geopolitics.

In New York, the Dow slipped 0.4 percent in mid-day trading Friday as falling crude prices dragged energy stocks lower and investors continued to digest the US-North Korea situation and US-China trade.

Shortly after the open, President Donald Trump had said the summit with North Korea that he had called off just 24 hours before could go ahead after all as talks with Pyongyang were continuing.

But investors were contending with the possibility that the summit’s cancellation could cause Trump to be more aggressive in trade talks with China.

Asia down on Trump move

Asian markets mostly fell Friday after the news that Trump had abruptly axed next month’s summit with North Korean leader Kim Jong Un.

For its part North Korea declared that it is willing to talk to the United States “at any time”, while China urged both sides to show restraint.

“The focus has been firmly centred upon Donald Trump, with his decision to cancel the June meeting with Kim Jong Un bringing about a return to the risk-off sentiment,” said analyst Joshua Mahony at trading firm IG.

Markets have been jittery this week as the US president had warned in recent days that he could cancel the summit, while also voicing his displeasure at a deal to avert a trade war with China and threatening tariffs on car imports.

Thursday’s summit cancellation took many by surprise — including North and South Korean officials — and fuelled concerns about the future of a rapprochement that has had many hoping for peace on the divided peninsula.

“It looks like we are back to fire and fury as the modus operandi for the White House again after President Trump (threatened) a new 25 percent car import tariff and cancelled the summit with North Korea,” said Greg McKenna, chief market strategist at AxiTrader.

Key figures around 15:45 GMT

New York – Dow: DOWN 0.4 percent at 24,725.08

London – FTSE 100: UP 0.18 percent at 7,730.28 points (close)

Paris – CAC 40: DOWN 0.1 percent at 5,542.55 (close)

Frankfurt – DAX 30: UP 0.65 percent at 12,938.01 (close)

EURO STOXX 50: DOWN 0.18 percent at 3,515.36

Tokyo – Nikkei 225: UP 0.1 percent at 22,450.79 (close)

Hong Kong – Hang Seng: DOWN 0.6 percent at 30,588.04 (close)

Shanghai – Composite: DOWN 0.4 percent at 3,141.30 (close)

Euro/dollar: DOWN at $1.1662 from $1.1720 at 2100 GMT

Pound/dollar: DOWN at $1.3318 from $1.3381

Dollar/yen: UP at 109.32 yen from 109.26 yen

Oil – Brent North Sea: DOWN $2.36 at $76.43 per barrel

Oil – West Texas Intermediate: DOWN $2.68 at $68.03

AFP

Saudis See Oil Price On Rise As Trump Blasts OPEC

Saudis See Oil Price On Rise As Trump Blasts OPEC
(FIles) US President Donald Trump speaks during a meeting with senior military leaders at the White House in Washington, DC, on April 9, 2018. NICHOLAS KAMM / AFP

 

Saudi Energy Minister Khaled al-Faleh said Friday the global market has the capacity to absorb higher oil prices, drawing a swift reaction from US President Donald Trump who accused OPEC of inflating prices.

Faleh’s statement at a meeting of oil producers in Saudi Arabia came as crude hit the highest level in more than three years.

“Looks like OPEC is at it again,” Trump tweeted.

“With record amounts of Oil all over the place, including the fully loaded ships at sea, Oil prices are artificially Very High! No good and will not be accepted!”

Oil has rebounded to over $70 a barrel, after prices crashed to as low as $26 in January 2016.

“I have not seen any impact on demand with current prices,” Faleh told reporters, ahead of a ministerial committee for OPEC and non-OPEC producers.

“Reduced energy intensity and higher productivity globally of energy input leads me to think that there is the capacity to absorb higher prices,” he said.

The ministerial committee said Friday that crude inventory levels have been reduced but were still higher than desired.

Stockpiles were at 2.83 billion barrels, down from their peak of 3.12 billion barrels two years ago, it said in a statement.

– Gunning for $80b –

Analysts believe Saudi Arabia, the world’s top crude exporter, aims to see much higher oil prices to overcome its domestic financial difficulties and raise the valuation of state oil giant Aramco ahead of a planned five-percent IPO.

After prices hit $70 a barrel, the kingdom “is thought to be unofficially gunning for $80 a barrel, with some even suggesting that it favours a return to $100 (a barrel) oil”,  Stephen Brennock of PVM Oil Associates said.

“As well as helping to reduce the Saudi government balance sheet, a further spike in prices would act as a boon for the impending Aramco IPO,” Brennock said.

“This is why Saudi Arabia is intentionally keeping the supply of oil tight,” Commerzbank said.

Faleh on Friday insisted the Organization of Petroleum Exporting Countries does not have a price target for oil.

“We never have a price target … Prices are determined by the market,” said Faleh who warned against the danger of price fluctuations, saying “volatility is our enemy.”

– Saudi-Russia ‘consensus’ –

Russia, the world’s top oil producer, on Friday gave its backing to the idea of establishing an enduring alliance for producers to continue their control of the market.

“We have created a very solid foundation for cooperation between OPEC and non-OPEC countries in the future even beyond the declaration of cooperation,” Russia Energy Minister Alexander Novak told reporters in Jeddah.

Oil kingpin Saudi Arabia said a “consensus” was emerging for a long-term cooperation agreement.

OPEC and non-OPEC producers struck a deal in late 2016 to trim production by 1.8 million barrels per day to reduce a global glut that sent prices crashing.

The deal, which is due to run out at the end of this year, has helped boost oil prices to above $70 a barrel from below $30 in early 2016.

The recovery has also been fuelled by geopolitical tensions, Trump’s threat to reimpose sanctions on Iran and production problems in Venezuela, Nigeria and Libya.

Benefitting from the higher prices, US oil producers have ramped up drilling, pushing domestic output to a record 10.5 million barrels a day last week, according to data from the US Energy Information Administration.

The United States had already overtaken Saudi Arabia as the world’s second-largest crude producer, pumping just under 10 million bpd while meeting its agreed production cuts.

AFP